Mothercare jobs lost as administrators consider closures

Several head office staff at Mothercare Australia have lost their jobs, and more workers are expected to be retrenched, as voluntary administrators assess the retailer's financial operations.

Administrators BRI Ferrier said in a creditors' report released last week that the level of trading losses by the mother and baby products chain meant it was "inevitable that some retrenchment of staff will occur".

"Indeed, some staff at the head office have been made redundant, with an annualised equivalent saving on employment expenses of approximately $1.3 million," the administrators said, adding that affected staff would be "privately advised".

Further details were not released.

Voluntary administrators Brian Silvia and Antony Resnick said they would also look at the closure of unprofitable stores.

The possible sale of Mothercare Australia would be finalised by February 28, with a second creditors' meeting to be held on March 5.

A spokesman for the administrators has been contacted for further comment.

Mothercare Australia - which employs up to 400 staff across 44 Mothercare, Early Learning Centre and Kids Central stores across the country, and has three stores in New Zealand - called in voluntary administrators after the collapse of its sale to the Myer family company.

Mr Silvia and Mr Resnick said in their first report to creditors, released on Thursday, that Mothercare Australia's balance sheet as of December 31 showed net assets of $6.2 million.

But a trading statement for the six months to the end of 2012 showed the company had incurred a net loss of $5.5 million, with contribution from the stores "insufficient to meet the logistics, supply, marketing, administration and overheads" even before amortisation and depreciation, they added.

The administrators said they were seeking to sell the business - as a whole or in part - as a going concern, and were seeking interested parties and expressions of interest.

Trading at the company's stores would continue, but certain aspects, such as the use of gift cards and the placement of orders, would not be processed.

A regular Mothercare Australia customer, Tara Bartlett, said she was stressed and frustrated by the uncertainty surrounding the company's situation.

"Having a baby is expensive and stressful enough and I'm not getting any answers," said Mrs Bartlett, who had made a deposit to buy baby furniture at Mothercare Australia.

Mrs Bartlett said she had been given mixed messages from the stores and administrators, prompting uncertainty about whether she would have to forgo her deposit.

"It's really starting to tarnish the company's image now," she said. "By upsetting that trust from their loyal customers ... no one is going to trust that company's name again."

UK-listed Mothercare plc, which has a 23 per cent stake in Mothercare Australia, closed more than 170 outlets in Britain last year as part of a restructure.

The UK retailer has faced tough trading conditions amid strong competition from supermarkets and other retailers.

Mothercare Australia makes up 7 per cent of the company's international retail sales, according to Mothercare plc.